Samstag, 27. April 2013

Future Of The Exit

Before starting a equity crowdfunding campaign think about your next round, typically it's Venture Capital. And venture-funded companies HAVE TO EXIT! This phenomenon often causes tension between the
entrepreneur, who may have a longer term company-building mentality, versus the
investor who wants to cash in.

Peter Thiel

This
tension is best exemplified in the legendary Facebook story, recently told by Peter Thiel:

The most important moment in my mind in the history
of Facebook occurred in July 2006,

he began. At the time, Facebook was just two years old. It was a
college site with roughly eight or nine million people on it. And, though it
was making $30 million in revenue, it was not profitable.

And we received an
acquisition offer from Yahoo for $1 billion,

Thiel said.

The three-person Facebook board at the
time–Zuckerberg, Thiel, and venture capitalist Jim Breyer–met on a Monday
morning.

Both Breyer and myself on balance thought we probably
should take the money,

recalled Thiel.

But Zuckerberg started the meeting
like, ‘This is kind of a formality, just a quick board meeting, it shouldn’t
take more than 10 minutes. We’re obviously not going to sell here’.

At the time, Zuckerberg was 22 years old.

Thiel said he remembered saying, “We should probably
talk about this. A billion dollars is a lot of money.” They hashed out the
conversation. Thiel said he and Breyer pointed out: “You own 25 percent. There’s
so much you could do with the money.”

Thiel recalled Zuckerberg said, in a nutshell: “I
don’t know what I could do with the money. I’d just start another social
networking site. I kind of like the one I already have.”

VCs
secretly hope they would have had the opportunity to invest in something as
momentous as Facebook, while also dreading the experience of having to deal
with someone as uncontrollable and obstinate as Marc.

Most
VCs would have a terribly difficult time with the above situation. Why?
Because most of them lack guts big time.